Intellectual Property Law

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Intellectual property law helps promote innovation by making sure monetary benefits go to the developers for their creative contributions to society. However, many small business owners aren’t aware of the steps needed to obtain rights to their original work or how to protect themselves against cases of infringement. Michael Kelly, an attorney from Jennings, Strouss & Salmon, will tell us how small businesses can protect their intellectual property.

TED SIMONS: Intellectual property law helps promote innovation and by protecting those who develop new and better ideas. But many small business owners don't know how to obtain the proper rights for their work. Here with more is Michael Kelly, an attorney from Jennings, Strouss and Salmon. Good to have you here, good to see you. Intellectual property, what is that?

MICHAEL KELLY: Intellectual property is the intellectual equivalent of real property. Instead of being measured by meets and bounds like a real estate, deed intellectual property is measured by the claims of a patent or description in a trademark or the meets and bounds of a copyright.

TED SIMONS: Can you compare a patent and a trademark and a copyright? How do they differ?

MICHAEL KELLY: Patents generally protects inventions. Whereas, trademarks protect brand identity. The company name, company logo, phrases, et cetera. Copyrights will protect works of authorship. User interfaces, songs, software significantly.

TED SIMONS: Interesting. Registering web addresses. Does that fall into any of those categories?

MICHAEL KELLY: We consider web addresses, URLs, et cetera, to be part of a company's portfolio of intellectual property. That's an important point to make for startup and emerging growth companies because those are the assets that are relatively simple to secure, don't need an attorney to do it, but from an investor's standpoint and a competitive standpoint it conveys that you're serious about building your business.

TED SIMONS: As far as the law is concerned, how does the law see intellectual property?

MICHAEL KELLY: Well, in order to have - in order to attract and maintain significant investment, a country has to have strong intellectual property laws and strong enforcement mechanisms. That's one of the reasons why the United States is a leader in technology innovation. Recently, last year the United States Supreme Court in a case called Alice Court versus VCLS Bank International, the Supreme Court took a relatively dim view of business methods and software patents. It's been said that was the death knell of software patents and I want to make sure we all understand that's not the case. Software patents are alive and well. We just need to be careful not to be greedy and try to claim more than you really invented.

TED SIMONS: So as far as -- you mentioned a country is strong because it has strong intellectual property law. Does intellectual property law vary, change from state to state?

MICHAEL KELLY: No. I mean there are nuances with respect to state registration, but the patent scheme is federal and the trademark scheme for registered trademarks is federal. The copyright laws are federal. Under the constitution those federal statutory schemes preempt state law. There's very little states can do to legislate in that arena anyway.

TED SIMONS: Is there much change country to country?

MICHAEL KELLY: Very much so. There's been efforts recently to harmonize among industrial nations to frankly to bring other countries up to the standards of U.S. protection.

TED SIMONS: So if I'm a small business I got Ted's hamburger Hamlet out there and I'm a big deal, I have built a better mousetrap, to mix metaphors, what do I need to know? Where do I need to go? How do I make sure I obtain the proper rights?

MICHAEL KELLY: With respect to trademarks?

TED SIMONS: Yes.

MICHAEL KELLY: What we recommend the companies do is recognize that when you use a Mark in connection with your goods and services in interstate commerce you have a trademark. You don't need to file, you don't need to do anything. We recommend that you file a federal registration so you can invoke the federal District Courts to enforce your rights, but by merely putting a TM next to your name or logo, your company name, you thereby let the world know you have an enforceable trademark. Similarly with copyrights, by fixing your work in a tangible medium, whether it's a song, software program or a sculpture, by fixing it in a tangible medium and putting a little legend at the bottom that says copyright, the year of first publication, you're letting the world know that you own your copyright. Again, like with trademarks we also recommend that you obtain a federal copyright registration so you can go to court and pursue infringers.

TED SIMONS: I was going to say, it's got to be more than just putting a little TM or putting a thing at the bottom of the art, but you're saying not necessarily so?

MICHAEL KELLY: Correct. Your trademarks and copyrights generally arise by operation of law when you either fix it in a tangible medium or use your trademark in connection with goods and services. The reason for registering it is so you can invoke the statutory scheme or go into federal court and get statutory damages if someone takes your work.

TED SIMONS: if you take the first step you play as well take the second, in other words. Action patents, whole different ball game?

MICHAEL KELLY: Patents is a whole different ballgame. The landscape is still pretty strong in terms of patent protection. In a recent case a few months ago, in February of this year for example, there was a case that underscores the value of strategic patenting, a small company called Smart Flash down in Tyler, Texas, sued Apple, filed a lawsuit in 2012 and 20 months later got a $532 million jury verdict against Apple. The interesting thing is Smart Flash didn't even have a product but they have sound idea.

TED SIMONS: I can think up ideas all day long. If I think of a flying space ship or something along that lines and ten years from now we got flying space ships being produced can I run around saying, ha ha no, no?

MICHAEL KELLY: You can do that. But if you've got an idea like that, it is appropriate to seek the advice of patent counsel and file your patent application. That's why Smart Flash was able to pick Apple's pocket for that kind of money. They did go through the diligence of filing and obtaining an enforceable patent for their invention. People say you often times, you can't patent ideas. Well you can certainly patent the manner in which an idea is implemented. That's what Smart Flash does.

TED SIMONS: So most important thing, last question. Most important thing a small business owner needs to know to protect themselves from infringement.

MICHAEL KELLY: If you're accused of infringing, you really should consult an intellectual property attorney so you don't get dinged for statutory damages or attorney's fees. The federal statutory schemes generally award a prevailing plaintiff with their attorney's fees. So if you're accused of infringement it's something you outta look at seriously.

TED SIMONS: And if you think someone is infringing on you, same thing?

MICHAEL KELLY: Same advice. Investors respect companies that take the steps to protect their rights.

TED SIMONS: All right, interesting stuff. Good to have you. Thanks for joining us.

MICHAEL KELLY: Always a pleasure.

Michael Kelly: attorney from Jennings, Strouss & Salmon

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